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24 June 2008

UA follows suit, fires 900+ pilots

United Airlines plans to fire 950 pilots, 15% of its current number of pilots, with further lay offs that could reach 1600 pilots. This is yet another repercussion of rising oil prices on the travel sector. We have seen BA increase the price of its luxury seats and Qantas facing strikes after staff demanded pay increases that the company couldn't afford, and American Airlines intend to cut 1000 jobs, all due to oil prices, and now UA is in the same boat.

As oil prices soar, airlines are trying as best they can to reduce the cost of running their businesses through all the methods mentioned above. Companies are discussing mergers as another way to somehow survive over the next few months, while stock value drops.

Overall, this paints a rather grim picture for the international travel scene, a glaring example of which is the "staycation", a term coined in the US, for people who are taking their holiday time but cannot afford to go anywhere and are in fact staying home. Cheap travel looks as though it may be a thing of the past as airlines cannot possibly cut back on technicians without risking the safety of their passengers, and will inevitably have to start increasing the price of tickets.